Ollie Clymow

David Woods

Failure to report on late payment of debt – it’s criminal!

Essentials / 06 February 2017

Regulations to impose criminal sanctions on directors of large companies (the definition of which is considered below) that fail to report the late payment of their companies’ debts have now been laid in Parliament.

The Regulations provide that as of 6 April 2017 large UK companies and LLPs will be required to publish half-yearly reports on their payment practices and in particular the average time taken to pay supplier invoices. These reports will be made freely available to the public via a Government website.

A company or LLP will be subject to the Regulations if, on their last two balance sheet dates, they exceed two or more of the following thresholds:

£36 million annual turnover;

£18 million balance sheet total; and

250 employees.

Directors who fail to comply with the Regulations will commit an offence which is punishable on summary conviction by a fine. The Department for Business, Energy & Industrial Strategy also anticipates that the Regulations will bring a market wide change to the payment practices of large companies and reduce the estimated £26.3 billion that is owed to the UK’s small-to-medium sized businesses.

However, previous Government proposals and legislation have failed to have a significant impact on the mind-set that large businesses can pay their debts when it suits them.

On 31 January 2017 the Government published guidance to assist large companies and LLPs prepare for the Regulations. However, if you have any outstanding concerns in relation to the Regulations, or debt recovery generally, then please do not hesitate to contact us.

Greenwoods GRM LLP is a Limited Liability Partnership, registered in England, registered number OC306912. Our registered office is Monkstone House, City Road, Peterborough, PE1 1JE. A list of the members’ names is available for inspection at our offices in Peterborough, Cambridge and London. Authorised and regulated by the Solicitors Regulation Authority, SRA number 401162. Details of the Solicitors' Code of Conduct can be found at www.sra.org.uk. All instructions accepted by Greenwoods GRM LLP are subject to our current Terms of Business. VAT Reg No: 161 9287 89.